trending Market Intelligence /marketintelligence/en/news-insights/trending/fwr-eschtczdv_796gykcq2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

S&P places Renesas on CreditWatch negative over $6.7B deal for IDT

Which Companies Win from Decarbonizing Electricity?

Mining Exploration Insights - November 2020

Southeast Asian broadband providers report varying performance amid COVID-19

Cable networks react to pandemic by cutting SG&A, programming costs


S&P places Renesas on CreditWatch negative over $6.7B deal for IDT

S&P Global Ratings placed Renesas Electronics Corp.'s BBB/A-2 long- and short-term issuer credit ratings on CreditWatch with negative implications following the company's proposed acquisition of Integrated Device Technology Inc. for about $6.7 billion.

The rating agency said Sept. 11 that while the deal will somewhat enhance Renesas' product lineup, diversity and profitability, it is likely to materially deteriorate the Japanese semiconductor manufacturer's key financial ratios, as the company expects to fund the transaction via cash, deposits and bank loans.

Renesas' debt-to-EBITDA ratio would worsen substantially to slightly below 4x from about 0.8x as of Dec. 31, 2017, due to the transaction, according to S&P. The company's annual EBITDA would be about ¥230 billion to ¥250 billion if the acquisition goes as planned.

The rating agency intends to resolve the CreditWatch placement upon completion of the associated legal procedures and the acquisition and noted that it might downgrade Renesas by one or two notches if the transaction proceeds as planned.

As of Sept. 10, US$1 was equivalent to ¥111.14.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.